There are certain tax responsibilities that must be followed when closing a business in Ohio. The following is provided to assist you in this process with the various business taxes. Businesses may also have additional obligations that need to be completed with other Ohio governmental agencies.

The requirements for dissolution of a domestic, for-profit corporation in Ohio have changed.

Revised Code section 1701.86(H)(2) has been changed, effective September 29, 2013, and requires that domestic for-profit corporations must first obtain a Certificate of Tax Clearance from the Department of Taxation in order to voluntarily dissolve and file a Certificate of Dissolution, Form 561, with the Secretary of State. Domestic for-profit corporations may no longer submit an affidavit in lieu of the Certificate of Tax Clearance.

To obtain the Certificate of Tax Clearance, corporate taxpayers must submit Form D5 “Notification of Dissolution or Surrender” to the Department after all applicable final returns are filed. The Department will then review all business tax accounts associated with the corporation to determine if there are any outstanding tax liabilities or filings. All outstanding tax liabilities or filings need to be filed and/or paid before a Certificate of Tax Clearance will be issued.

For corporations dissolving under Revised Code sections 1702 (nonprofit corporations) or 1703 (foreign corporations), or 1705 (limited liability corporations), the requirements for dissolution have not changed.

In addition to the requirements above, all business entities must close their accounts with the Ohio Department of Taxation to avoid further billing and possible assessment. Please see below for the forms required by the business tax divisions.

Commercial Activity Tax:

Taxpayers who do not anticipate taxable gross receipts exceeding $150,000.00, must cancel their account on or before May 10th of the current calendar year to avoid being subject to the annual minimum tax for that calendar year.

Taxpayers that are registered as a combined or consolidated elected taxpayer group, should complete the CAT CR form and provide documentation detailing the value of ownership interest and registration status of the remaining members of the group. It may be necessary for the group to remain intact if some of the members remain subject to CAT.

The taxpayer is required to file and pay all tax periods through the cancellation date.

Taxpayers may cancel their CAT account via the CAT CR form which available on the department's website or on Ohio Business Gateway (OBG).

Sales and Use Tax:

A business with a vendor’s license is required to file a final sales tax return. This return would be filed for the period in which the final sale was made. The vendor’s license can be closed while filing the final return through the Ohio Business Gateway by selecting “cancel my account”, or through the Tele-File system.

If the final return has previously been filed, form ST-3C can be used to request a date of cancellation.

Vendors who also have a liquor license may not cancel their vendor’s license until the liquor license attached is transferred, closed or put into safe keeping. In order to change the status of liquor license please contact the Department of Liquor Control.

Corporation Franchise Tax:

In order to dissolve a corporation all business tax accounts must be current on all filings and payments and closed.

Corporate taxpayers are required to file form D5 “Notification of Dissolution or Surrender” with the Ohio Department of Taxation once a final return and payment are made. The department of Taxation will then review all business tax accounts associated with the corporation to determine if there are any outstanding tax liabilities or filings. All outstanding liabilities or filings need to be filed and/or paid before a tax release will be issued.

The Ohio Revised Code requires different procedures and forms to be filed with the Ohio Secretary of State's office in order to dissolve or otherwise close a business in Ohio. In order to get the appropriate forms and instructions, please contact the Ohio Secretary of State.

Please be prepared to provide the following information when contacting the Secretary of State's office:

Employer Withholding Tax:

A business that withholds individual income and/or school district income from its employee(s), and is closing, must complete form IT-WHC Change of Ohio Employer Name, Address or Status. This may also be done when filing the final return (IT 941) through Ohio Business Gateway by checking the Yes button for Cancel Withholding Account.

The employer also must file form IT 941 Ohio Employer’s Annual Reconciliation no later than 15 days after the discontinuation of business. This form may also be filed online through Ohio Business Gateway.

If the company has more than 250 employees form IT-3 and all W-2s are required to be filed no later than 60 days from the last date of payroll.

School District Employer Withholding Tax:

A business that withholds individual income and/or school district income from its employee(s), and is closing, must complete form IT-WHC Change of Ohio Employer Name, Address or Status. This may also be done when filing the final return (SD-141) through Ohio Business Gateway by checking the Yes button for Cancel Withholding Account.

The employer also must file form SD-141 Ohio School District Employer’s Annual Reconciliation no later than 15 days after the discontinuation of business. This form may also be filed online through Ohio Business Gateway.

If the company has more than 250 employees form IT-3 and all W-2s are required to be filed no later than 60 days from the last date of payroll.

Excise & Energy Tax:

The taxpayer must notify the Excise & Energy Tax Division in writing of the date the taxpayer intends to cancel the account.

Excise & Energy Tax Division
P.O. Box 530
Columbus OH 43216-0530

Or Fax (206) 350-6722

The taxpayer is required to file and pay all required taxes up through the cancellation date. If the taxpayer cancels in the middle of a reporting period, the taxpayer must file a return and payment for the partial period.

The taxpayer should contact the Excise & Energy Tax Division to verify the account has been closed, and the taxpayer has fulfilled their filing and payment requirements. The Excise & Energy Tax Division phone number is (855) 466-3921.